Discount brokerage Zerodha increased securities transaction tax (STT) on derivative trades in the platform.

What Happened: Nithin Kamath, CEO of Zerodha said in a LinkedIn post that the company will not charge brokerage on equity delivery.

The brokerage increased the STT for derivatives to 0.1% of the premium on the sell side from 0.0625%. The transaction charges have been decreased to 0.035% from 0.0495%.

Kamath said in the LinkedIn post that this results in options trading cost increasing by ₹2,303 per crore for premium on the selling side on NSE and a jump of ₹2,050 per crore on BSE. 

In futures trading, the STT has been increased to 0.02% from 0.0125% while transaction charges have been decreased to 0.00173% from 0.00183%. This will result in a net increase of ₹735 per crore of futures turnover on the selling side. 

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Kamath added in the post the change will affect futures traders more as the STT is charged on the entire contract value of futures, while in options it is charged only based on the premium. 

The changes will come into effect from October 1, Tuesday. 

The rise in STT comes after the Securities Exchange Board of India mandated stock exchanges to levy "true to label" charges from brokerages and other market players. This means exchanges need to charge all players equally rather than a slab rate based on volume which was done previously.

Stock exchanges BSE and NSE raised transaction charges on the derivatives segment after the circular came out. 

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